Sellers Return...

FUNDAMENTAL ANALYSIS
The Dow ended what started out as an extremely encouraging day down 121.7 points by the end of the session. The Dow was bolstered during the first few hours of trading by better than expected ADP report and ISM services index (see economic calendar. However, sellers returned to the market by mid day and took the index down decisively. This sell off was a little surprising since investors should be looking forward to a surprise in the unemployment number as well since the ADP report beat expectations. On the other hand, the ADP report and the Job report need not have that close a correlation especially during turning points. Investors were clearly still playing the waiting game, not wanting to risk anything.

Tomorrow, investors would continue to look for signs of stabilization and clues as to what the unemployment rate in the Job report would be like in the jobless claims number. Tomorrow's jobless claim consensus is calling for a lower number than last month's number... would the number surprise again like the ISM and ADP report has?

TECHNICAL ANALYSIS
On the technical front, the Dow continues to trade along the 8000 support level but formed a higher high and high lower today. Even though this is supposed to be a bullish sign, there was clearly a lack of bullish momentum which failed to turn the short term bearish momentum around. The Dow continues to be in its short term and intermediate term neutral trend. We will continue to monitor for a breakout.